Bill
Number: H.B. 2562
Yarbrough
Floor Amendment
Reference
to: FIN committee amendment
Amendment
drafted by: Leg Council
FLOOR
AMENDMENT EXPLANATION
Yarbrough
Floor Amendment to H.B. 2562
1. Provides
a public retirement plan, 401(a), and LTD benefits for public employees who are
otherwise ineligible for ASRS.
- Establishes the
401(a) to be a 414(h) pick up for income tax purposes which will be
administered under the current Third Party Administrator (TPA) contract.
Requires a competitive bid at least every five years on expiration of the
current contract.
3. Limits
the ASRS 401(a) plan to employers who have entered into an ASRS participation
agreement wherein the employee has not entered into an alternative
retirement or compensation agreement with the employer.
4. Requires
employers to cooperate, collaborate and follow ASRS procedures to ensure proper
enrollment of employees.
5. Requires
written determinations for Social Security or ASRS eligibility.
6. Provides
a process for enrolling employees in the 401(a) during the Social
Security and ASRS administrative appeals of written determinations of
eligibility.
7. Increases
the ASRS administration account appropriation to $430,000 for the expansion of
LTD benefits to 401(a) members and IRS qualification processes.
Page 1, line 7, after the first period insert "Cooperate and collaborate with ASRS and follow
all ASRS procedures to"
Line 16, after "a"
insert "written"
Line 17, strike "and
application by ASRS"
Line 19, after "system"
insert "or the application or use
of that written determination by ASRS for ASRS membership"
Line 20, strike "38‑955"
insert "38‑956"
Line 21, strike "38‑952"
insert "38‑955";
after "the"
insert "social security
administration or"
Line 22, after "process"
insert ", unless the employee has
entered into an agreement with the employer that requires participation in an
alternative retirement plan or for other compensation provided in lieu of
retirement benefits"
Page 2, line 2, strike "38‑955" insert "38‑956"; strike
"38‑952"
insert "38‑955"
Line 5, strike "38‑955"
insert "38‑956"
Line 9, after "a"
insert "written"
Line 10, strike "and
application by ASRS"
Line 12, after "system"
insert "or the application or use
of that written determination by ASRS for ASRS membership"
Line 16, after "the"
insert "social security
administration or"
Line 17, strike "38‑955"
insert "38‑956"
Line 18, strike "38‑952"
insert "38‑955, unless the
employee has entered into an agreement with the employer that requires
participation in an alternative retirement plan or for other compensation
provided in lieu of retirement benefits"
Line 21, after the "ASRS" insert "and is participating in the plan established
by ASRS pursuant to section 38-955"
Page 2, line 22, strike "38‑955" insert "38‑956"
Line 23, strike "38‑952"
insert "38‑955"
Between lines 23 and 24, insert:
"C. This
section only applies to an employer that has entered into an agreement approved
by the board under section 38‑729."
Between lines 24 and 25, insert:
Lines 33 and 41, strike
"38‑955"
insert "38‑956"
Page 9, line 16, after the first comma insert:
Line 18, strike "section" insert
"sections"; after "38‑955" insert "and 38‑956"
Between lines 18 and 19, insert:
"START_STATUTE38-955. Defined contribution plan;
establishment; administration
A. The Arizona state retirement system
board shall establish, administer, manage and operate a defined contribution
plan for employees enrolled pursuant to sections 38‑728 and 38‑956.
B. The
Arizona state retirement system board may:
1. Delegate
authority to implement the plan to its director appointed pursuant to section
38-715.
2. Employ
services it deems necessary, including legal services, for the operation and
administration of the plan.
3. Administer
the plan through contracts with multiple vendors.
4. Perform
all acts, whether or not expressly authorized, that it deems necessary and
proper for the operation and protection of the plan.
5. For
the purposes of this article, enter into intergovernmental agreements pursuant
to title 11, chapter 7, article 3.
C. Notwithstanding
title 41, chapter 23, the Arizona state retirement system board may employ the
services of the third‑party administrator that is contracted on the
effective date of this section to administer the supplemental defined
contribution plan pursuant to this article to also administer the defined contribution
plan established pursuant to this section until the end of the current
contract. On expiration of that contract, the Arizona state
retirement system board shall participate in a competitive bid process at least
once every five years to contract with a private person or any qualified
company or companies to administer the defined contribution plan established
pursuant to this section.
D. The
defined contribution plan shall be designed to be a qualified governmental plan under
section 401(a) of the internal revenue code. The legislature intends that the defined
contribution plan is a qualified plan under section 401 of the internal revenue
code, as amended, or successor provisions of law, and that the plan is exempt
from taxation under section 501 of the internal revenue code. The board may
adopt any additional provisions to the plan that are necessary to fulfill this
intent.
E. Although
designated as employee contributions, all employee contributions made to the
plan shall be picked up and paid by the employer in lieu of contributions by
the employee. The contributions picked up by an employer may be made through a
reduction in the employee's compensation or an offset against future
compensation increases, or a combination of both. An employee participating in
the plan does not have the option of choosing to receive the contributed
amounts directly instead of the employer paying the amounts to the plan. It is
intended that all employee contributions that are picked up by the employer as
provided in this subsection shall be treated as employer contributions under section 414(h) of the internal revenue code,
shall be excluded from employees' gross income for federal and state income tax
purposes and are includable in the gross income of the employees or their
beneficiaries only in the taxable year in which they are distributed.END_STATUTE"
Page 14, line 19, strike "38‑955." insert
"38‑956."
Page 9, line 19, strike "38‑952" insert
"38‑955"
Line 20, strike "person" insert "employee"
Line 29, after the first
quotation marks insert:
"5. The
employee has not entered into an agreement with the employer that requires
participation in an alternative retirement plan or for other compensation
provided in lieu of retirement benefits."
Line 32, strike "38‑952"
insert "38‑955"
Page 10, line 8, strike "$105,000" insert
"$430,000"
Amend title to conform